The most senior elected member of the British National party could face suspension from the London assembly for up to six months after he admitted inventing three murders to highlight knife crime, it emerged today.

A joint investigation by the Greater London authority and Barking and Dagenham council has concluded that Richard Barnbrook brought his office and the respective authorities into disrepute after falsely claiming in an interview that three murders had taken place over a three week period in the Barking and Dagenham area.

Barnbrook was elected to the London assembly last year and is also a councillor in Barking and Dagenham.

The findings relating to the BNP's highest profile member in elected office will be a blow to the party just a day after it used its European and local government election launch to attempt to present itself to the electorate as a credible alternative to mainstream parties following the debacle over MPs' expenses.

The complaint against Barnbrook was first lodged last September after he claimed in an interview posted on YouTube and his own website that a girl had been murdered within the borough within the past three weeks. "We don't know who's done it. Her girlfriend was attacked inside an educational institute," Barnbrook said in the prerecorded interview in which he sought to highlight failings in tackling knife crime.

He also said that two weeks previously "there was another attack by knives on the streets of Barking and Dagenham where two people were murdered".

Valerie Rush, a Labour cabinet member at the local authority, accused Barnbrook of "openly and outrageously" lying to "whip up fears in the London community".

In her complaint to the GLA and the council, Rush said Barnbrook had acted in a way which brought his honesty and integrity as a councillor into disrepute.

Barnbrook nevertheless refused to apologise for the statements "until knife crime is over".

This meant that the interview – filmed by Simon Darby, the BNP's deputy leader, who works part-time for Barnbrook in the London assembly – was posted on the internet despite Barnbrook knowing the statements were incorrect, the report noted.

The Metropolitan police confirmed that there had been no murders or incidents resulting in critical injuries requiring intensive care in the time period cited, and that murders in the area were actually decreasing.

By the time the draft investigation report was published, Barnbrook had changed his position and claimed that he did not accept that "the inaccuracy of my statement was deliberate". He also stated: "I did not know that the data in the recording was incorrect. I would not have posted the recording if I had known that it was incorrect."

Barnbrook also insisted that "once I realised that the data was incorrect, the recording was removed from the internet on my instruction within 24 hours".

The investigation ruled that Barnbrook's original claim that he knew what he was saying was untrue "seems at odds" with the principles of honesty and integrity. "If the public were aware that Mr Barnbrook was in fact putting out statements that he knew were false, we consider that his could reasonably be regarded as undermining public confidence in both members and the authorities as a whole in being able to fulfil their function."

Barnbrook now faces a full hearing after the respective committees at the GLA and the London borough considered the investigation's report two weeks ago.

The report's findings prepare the way for one of a range of sanctions, including suspension from office for up to six months.